Arrow Electronics (ARW) investor relations material

Executive summary

• Q3 2025 consolidated sales reached $7.71 billion, up 13% year-over-year, with net income attributable to shareholders of $109 million and non-GAAP diluted EPS of $2.41, both exceeding guidance.

• Both Global Components and ECS segments performed strongly, benefiting from secular trends in AI and cloud, despite margin pressures and a gradually recovering market.

• Leadership transition underway with William F. Austen appointed interim CEO.

• A multi-year Operating Expense Efficiency Plan was launched, targeting $185 million in pre-tax restructuring charges and $90–$100 million in annual cost savings by 2026.

• Quick resolution of regulatory issues in China, with subsidiaries removed from the BIS entity list, though temporary impacts were noted.

Financial highlights

• Q3 2025 sales were $7.71 billion, up 13% year-over-year, with non-GAAP net income of $126 million and non-GAAP diluted EPS of $2.41.

• Gross margin was 10.8%, down 70 bps year-over-year, and non-GAAP operating margin was 2.8%.

• Cash used for operating activities in Q3 was $282 million; cash and cash equivalents at quarter-end were $213.6 million.

• Gross balance sheet debt at quarter-end was $3.1 billion.

• Foreign currency changes positively impacted Q3 sales by $128 million and EPS by $0.08.

Outlook and guidance

• Q4 2025 sales expected between $7.8–$8.4 billion; Global Components: $5.1–$5.5 billion; ECS: $2.7–$2.9 billion.

• Q4 non-GAAP diluted EPS guidance: $3.44–$3.64; GAAP EPS: $3.08–$3.28.

• Foreign currency expected to increase Q4 sales by $226 million and EPS by $0.22 year-over-year.

• Gradual cyclical recovery expected to continue into 2026, with regional and customer mix headwinds.

• Operating Expense Efficiency Plan to be completed by end of fiscal 2026, targeting $90–$100 million in annual cost savings.